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  • 1.  How business schools have failed business

    Posted 04-24-2009 09:03


    An interesting article....


    • APRIL 24, 2009, 3:58 A.M. ET

    How Business Schools Have Failed Business

    Why not more education on the responsibility of boards?

    By MICHAEL JACOBS

    As we try to understand why our economy is so troubled, fingers are increasingly being pointed at the academic institutions that educated those who got us into this mess. What have business schools failed to teach our business leaders and policy makers? There are three profound failures of sound business practices at the root of the economic crisis, and none of them have been adequately addressed by our business schools.

    Just about everyone agrees that misaligned incentive programs are at the core of what brought our financial system to its knees. Countless individuals became multimillionaires by gambling away shareholders' money. Incentive systems that rewarded short-term gain took precedence over those designed for long-term value creation.

    We could chalk this all up to greed, as many pundits have. But first we should ask how many of the business schools attended by America's CEOs and directors educate their students about the best way to design management compensation systems. Amazingly, this subject is not systematically addressed at most business schools, and not even discussed at others.

    Secondly, as Washington scrambles to restructure the financial regulatory system, those who still believe in the private sector are asking why corporate boards were AWOL as institution after institution crumbled. Why did it take rumors of nationalization and a drop in Citicorp stock to below $2 a share to inspire Citigroup to nominate directors with experience in financial markets?

    American icon General Electric was stripped of its coveted AAA-rating because of problems emanating from its financial services unit. Yet its board has only one director with experience in a financial institution. If it is the board's job to oversee a corporation, it seems logical that there would be a segment in the core curriculum of every business school devoted to board structure, composition and processes. But most programs don't cover the topic.

    The third breakdown came in the investment community. Nearly 20 years ago I wrote a book titled "Short-Term America" that warned about the growing chasm between those who provide capital and the companies who use it. The concept is simple: When money provided to homeowners or businesses comes from an anonymous source, possibly half way around the world, there are serious challenges to operating a functioning system of accountability.

    Nationally, finance departments at business schools offer hundreds of courses in asset securitization and portfolio diversification. They have taught a generation of financial leaders that risk can be diversified away. But in their B-school days, few investment bankers examined the notion of "agency costs." That concept explains that as the gulf between the provider and the user of capital widens, the risks involved with selecting and monitoring the participants in the portfolio increase. It should come as no surprise that financial institutions amassed securities that consist of a diversified portfolio of deadbeats.

    About 70% of the shares of American corporations are held by institutional investors such as pension and mutual funds. These organizations are brimming with MBAs. But how many of these MBAs took a class devoted to how shareholders should exercise their rights and obligations as the owners of America's corporations? Few, if any. When shareholders are uneducated about their obligations, how can a corporate accountability system function properly?

    Recently, when I delivered a guest lecture at another school, a distraught-looking student pulled me aside after class. She explained that my talk was very disturbing to her. After investing two years and $100,000, she was only weeks away from receiving her MBA. But prior to our class, she had never heard a discussion about board responsibilities or the rights of shareholders. She said she felt cheated.

    By failing to teach the principles of corporate governance, our business schools have failed our students. And by not internalizing sound principles of governance and accountability, B-school graduates have matured into executives and investment bankers who have failed American workers and retirees who have witnessed their jobs and savings vanish.

    Most B-schools paper over the topic by requiring first-year students to take a compulsory ethics class, which is necessary, but not sufficient. Would Bernie Madoff have acted differently if he had aced his ethics final?

    Could we have avoided most of the economic problems we now face if we had a generation of business leaders who were trained in designing compensation systems that promote long-term value? And who were educated in the proper make-up and responsibilities of boards? And who were enlightened as to how shareholders can use their proxies to affect accountability? I think we could have.

    America's business schools need to rethink what we are teaching -- and not teaching -- the next generation of leaders.

    Mr. Jacobs, a professor at the University of North Carolina's Kenan-Flager Business School, was director of corporate finance policy at the U.S. Treasury from 1989 to 1991.

     


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  • 2.  How business schools have failed business

    Posted 04-24-2009 10:40
    Thanks Archie,

    Interesting yes, but I bristle a bit at the narrow view of ethics this
    piece has. The claim is that Madoff would have acted no differently if
    he had aced his ethics final.

    But, as my forthcoming piece in the Chronicle argues, teaching ethics
    is not merely about providing vocational tools to comply with
    regulations and standard practices. It's also about inculcating a
    deeper worldview. Proper incentives and board structures are indeed
    important as Jacobs says. But we must also seek to open business
    students' eyes to higher aims--in business and in life. That's what a
    genuine education does.

    And thus yes, I should say that if Madoff had had a truly good ethics
    class (or two) during his formative years, he might very well have
    acted differently. And even if he remained a cynic, it would have been
    harder for him to act upon that attitude in a wider culture of ethical
    consciousness fostered by such courses.

    Julian

    On Fri, Apr 24, 2009 at 7:03 AM, Archie Carroll <acarroll@uga.edu> wrote:
    >
    >
    > An interesting article....
    >
    >
    > APRIL 24, 2009, 3:58 A.M. ET
    >
    > How Business Schools Have Failed Business
    >
    > Why not more education on the responsibility of boards?
    >
    > By MICHAEL JACOBS
    >
    > As we try to understand why our economy is so troubled, fingers are
    > increasingly being pointed at the academic institutions that educated those
    > who got us into this mess. What have business schools failed to teach our
    > business leaders and policy makers? There are three profound failures of
    > sound business practices at the root of the economic crisis, and none of
    > them have been adequately addressed by our business schools.
    >
    > Just about everyone agrees that misaligned incentive programs are at the
    > core of what brought our financial system to its knees. Countless
    > individuals became multimillionaires by gambling away shareholders' money.
    > Incentive systems that rewarded short-term gain took precedence over those
    > designed for long-term value creation.
    >
    > We could chalk this all up to greed, as many pundits have. But first we
    > should ask how many of the business schools attended by America's CEOs and
    > directors educate their students about the best way to design management
    > compensation systems. Amazingly, this subject is not systematically
    > addressed at most business schools, and not even discussed at others.
    >
    > Secondly, as Washington scrambles to restructure the financial regulatory
    > system, those who still believe in the private sector are asking why
    > corporate boards were AWOL as institution after institution crumbled. Why
    > did it take rumors of nationalization and a drop in Citicorp stock to below
    > $2 a share to inspire Citigroup to nominate directors with experience in
    > financial markets?
    >
    > American icon General Electric was stripped of its coveted AAA-rating
    > because of problems emanating from its financial services unit. Yet its
    > board has only one director with experience in a financial institution. If
    > it is the board's job to oversee a corporation, it seems logical that there
    > would be a segment in the core curriculum of every business school devoted
    > to board structure, composition and processes. But most programs don't cover
    > the topic.
    >
    > The third breakdown came in the investment community. Nearly 20 years ago I
    > wrote a book titled "Short-Term America" that warned about the growing chasm
    > between those who provide capital and the companies who use it. The concept
    > is simple: When money provided to homeowners or businesses comes from an
    > anonymous source, possibly half way around the world, there are serious
    > challenges to operating a functioning system of accountability.
    >
    > Nationally, finance departments at business schools offer hundreds of
    > courses in asset securitization and portfolio diversification. They have
    > taught a generation of financial leaders that risk can be diversified away.
    > But in their B-school days, few investment bankers examined the notion of
    > "agency costs." That concept explains that as the gulf between the provider
    > and the user of capital widens, the risks involved with selecting and
    > monitoring the participants in the portfolio increase. It should come as no
    > surprise that financial institutions amassed securities that consist of a
    > diversified portfolio of deadbeats.
    >
    > About 70% of the shares of American corporations are held by institutional
    > investors such as pension and mutual funds. These organizations are brimming
    > with MBAs. But how many of these MBAs took a class devoted to how
    > shareholders should exercise their rights and obligations as the owners of
    > America's corporations? Few, if any. When shareholders are uneducated about
    > their obligations, how can a corporate accountability system function
    > properly?
    >
    > Recently, when I delivered a guest lecture at another school, a
    > distraught-looking student pulled me aside after class. She explained that
    > my talk was very disturbing to her. After investing two years and $100,000,
    > she was only weeks away from receiving her MBA. But prior to our class, she
    > had never heard a discussion about board responsibilities or the rights of
    > shareholders. She said she felt cheated.
    >
    > By failing to teach the principles of corporate governance, our business
    > schools have failed our students. And by not internalizing sound principles
    > of governance and accountability, B-school graduates have matured into
    > executives and investment bankers who have failed American workers and
    > retirees who have witnessed their jobs and savings vanish.
    >
    > Most B-schools paper over the topic by requiring first-year students to take
    > a compulsory ethics class, which is necessary, but not sufficient. Would
    > Bernie Madoff have acted differently if he had aced his ethics final?
    >
    > Could we have avoided most of the economic problems we now face if we had a
    > generation of business leaders who were trained in designing compensation
    > systems that promote long-term value? And who were educated in the proper
    > make-up and responsibilities of boards? And who were enlightened as to how
    > shareholders can use their proxies to affect accountability? I think we
    > could have.
    >
    > America's business schools need to rethink what we are teaching -- and not
    > teaching -- the next generation of leaders.
    >
    > Mr. Jacobs, a professor at the University of North Carolina's Kenan-Flager
    > Business School, was director of corporate finance policy at the U.S.
    > Treasury from 1989 to 1991.
    >
    >
    >
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: http://sim.aomonline.org
    > _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery options,
    > you can do so online at:
    > http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1
    > _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery
    options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1


  • 3.  How business schools have failed business

    Posted 04-24-2009 12:51
    I seem to remember reading, hearing, dreaming perhaps, that while at Harvard
    Skillings had an ethics course? Of course as to whether it was a good ethics
    course..... G

    -----Original Message-----
    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On
    Behalf Of julian friedland
    Sent: Friday, April 24, 2009 9:40 AM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] How business schools have failed business

    Thanks Archie,

    Interesting yes, but I bristle a bit at the narrow view of ethics this
    piece has. The claim is that Madoff would have acted no differently if
    he had aced his ethics final.

    But, as my forthcoming piece in the Chronicle argues, teaching ethics
    is not merely about providing vocational tools to comply with
    regulations and standard practices. It's also about inculcating a
    deeper worldview. Proper incentives and board structures are indeed
    important as Jacobs says. But we must also seek to open business
    students' eyes to higher aims--in business and in life. That's what a
    genuine education does.

    And thus yes, I should say that if Madoff had had a truly good ethics
    class (or two) during his formative years, he might very well have
    acted differently. And even if he remained a cynic, it would have been
    harder for him to act upon that attitude in a wider culture of ethical
    consciousness fostered by such courses.

    Julian

    On Fri, Apr 24, 2009 at 7:03 AM, Archie Carroll <acarroll@uga.edu> wrote:
    >
    >
    > An interesting article....
    >
    >
    > APRIL 24, 2009, 3:58 A.M. ET
    >
    > How Business Schools Have Failed Business
    >
    > Why not more education on the responsibility of boards?
    >
    > By MICHAEL JACOBS
    >
    > As we try to understand why our economy is so troubled, fingers are
    > increasingly being pointed at the academic institutions that educated
    those
    > who got us into this mess. What have business schools failed to teach our
    > business leaders and policy makers? There are three profound failures of
    > sound business practices at the root of the economic crisis, and none of
    > them have been adequately addressed by our business schools.
    >
    > Just about everyone agrees that misaligned incentive programs are at the
    > core of what brought our financial system to its knees. Countless
    > individuals became multimillionaires by gambling away shareholders' money.
    > Incentive systems that rewarded short-term gain took precedence over those
    > designed for long-term value creation.
    >
    > We could chalk this all up to greed, as many pundits have. But first we
    > should ask how many of the business schools attended by America's CEOs and
    > directors educate their students about the best way to design management
    > compensation systems. Amazingly, this subject is not systematically
    > addressed at most business schools, and not even discussed at others.
    >
    > Secondly, as Washington scrambles to restructure the financial regulatory
    > system, those who still believe in the private sector are asking why
    > corporate boards were AWOL as institution after institution crumbled. Why
    > did it take rumors of nationalization and a drop in Citicorp stock to
    below
    > $2 a share to inspire Citigroup to nominate directors with experience in
    > financial markets?
    >
    > American icon General Electric was stripped of its coveted AAA-rating
    > because of problems emanating from its financial services unit. Yet its
    > board has only one director with experience in a financial institution. If
    > it is the board's job to oversee a corporation, it seems logical that
    there
    > would be a segment in the core curriculum of every business school devoted
    > to board structure, composition and processes. But most programs don't
    cover
    > the topic.
    >
    > The third breakdown came in the investment community. Nearly 20 years ago
    I
    > wrote a book titled "Short-Term America" that warned about the growing
    chasm
    > between those who provide capital and the companies who use it. The
    concept
    > is simple: When money provided to homeowners or businesses comes from an
    > anonymous source, possibly half way around the world, there are serious
    > challenges to operating a functioning system of accountability.
    >
    > Nationally, finance departments at business schools offer hundreds of
    > courses in asset securitization and portfolio diversification. They have
    > taught a generation of financial leaders that risk can be diversified
    away.
    > But in their B-school days, few investment bankers examined the notion of
    > "agency costs." That concept explains that as the gulf between the
    provider
    > and the user of capital widens, the risks involved with selecting and
    > monitoring the participants in the portfolio increase. It should come as
    no
    > surprise that financial institutions amassed securities that consist of a
    > diversified portfolio of deadbeats.
    >
    > About 70% of the shares of American corporations are held by institutional
    > investors such as pension and mutual funds. These organizations are
    brimming
    > with MBAs. But how many of these MBAs took a class devoted to how
    > shareholders should exercise their rights and obligations as the owners of
    > America's corporations? Few, if any. When shareholders are uneducated
    about
    > their obligations, how can a corporate accountability system function
    > properly?
    >
    > Recently, when I delivered a guest lecture at another school, a
    > distraught-looking student pulled me aside after class. She explained that
    > my talk was very disturbing to her. After investing two years and
    $100,000,
    > she was only weeks away from receiving her MBA. But prior to our class,
    she
    > had never heard a discussion about board responsibilities or the rights of
    > shareholders. She said she felt cheated.
    >
    > By failing to teach the principles of corporate governance, our business
    > schools have failed our students. And by not internalizing sound
    principles
    > of governance and accountability, B-school graduates have matured into
    > executives and investment bankers who have failed American workers and
    > retirees who have witnessed their jobs and savings vanish.
    >
    > Most B-schools paper over the topic by requiring first-year students to
    take
    > a compulsory ethics class, which is necessary, but not sufficient. Would
    > Bernie Madoff have acted differently if he had aced his ethics final?
    >
    > Could we have avoided most of the economic problems we now face if we had
    a
    > generation of business leaders who were trained in designing compensation
    > systems that promote long-term value? And who were educated in the proper
    > make-up and responsibilities of boards? And who were enlightened as to how
    > shareholders can use their proxies to affect accountability? I think we
    > could have.
    >
    > America's business schools need to rethink what we are teaching -- and not
    > teaching -- the next generation of leaders.
    >
    > Mr. Jacobs, a professor at the University of North Carolina's Kenan-Flager
    > Business School, was director of corporate finance policy at the U.S.
    > Treasury from 1989 to 1991.
    >
    >
    >
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: http://sim.aomonline.org
    > _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery options,
    > you can do so online at:
    > http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1
    > _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery
    options, you can do so online at:
    http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1
    _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery
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  • 4.  How business schools have failed business

    Posted 04-24-2009 13:43
    Mr. Jacobs makes an interesting point, but overstates the pervasiveness of the problem.  One of the things that drew me to San Diego State in 2001 was that the College had been offering a dedicated MBA Seminar in Corporate Governance since 1999.  The class is still going strong, and Corporate Governance is now a required class in our Executive MBA program.  We've also added a dedicated week on corporate governance to our undergraduate Business Ethics classes.  It's a core subject, integrating Strategy, Finance, Ethics, and Law, that will only become more central in the future.

    Lori

    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    San Diego State University
    San Diego, CA   92182


    On 4/24/09 6:03 AM, "Archie Carroll" <acarroll@uga.edu> wrote:
    • APRIL 24, 2009, 3:58 A.M. ET
    How Business Schools Have Failed Business
    Why not more education on the responsibility of boards?
       
    By MICHAEL JACOBS
    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



  • 5.  How business schools have failed business

    Posted 04-24-2009 14:21

    Colleagues,

    Since we're on this subject of corporate governance, if you were going to give MBAs one great reading on the topic (from and ethics and CSR perspective), what would it be?

     

    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Lori Ryan
    Sent: Friday, April 24, 2009 1:43 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] How business schools have failed business

     

    Mr. Jacobs makes an interesting point, but overstates the pervasiveness of the problem.  One of the things that drew me to San Diego State in 2001 was that the College had been offering a dedicated MBA Seminar in Corporate Governance since 1999.  The class is still going strong, and Corporate Governance is now a required class in our Executive MBA program.  We've also added a dedicated week on corporate governance to our undergraduate Business Ethics classes.  It's a core subject, integrating Strategy, Finance, Ethics, and Law, that will only become more central in the future.

    Lori

    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    San Diego State University
    San Diego, CA   92182


    On 4/24/09 6:03 AM, "Archie Carroll" <acarroll@uga.edu> wrote:

    • APRIL 24, 2009, 3:58 A.M. ET

    How Business Schools Have Failed Business
    Why not more education on the responsibility of boards?
      
    By MICHAEL JACOBS

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



  • 6.  How business schools have failed business

    Posted 04-24-2009 14:36
    The Business Roundtable put out a very nice corporate governance overview piece in 2005:  http://www.businessroundtable.org/sites/default/files/CorporateGovPrinciples.pdf   My more theoretical favorite is Chapter 12 of Oliver Williamson's 1985 Economic Institutions of Capitalism (which must be accompanied by the book's Figure 1-2).  The bible on the subject (although much more than you need) is Monks and Minow's Corporate Governance tomb, now in its 4th (2008) edition.  These aren't specifically focused on ethics, but virtually any CG reading has an implicit (if not explicit) ethical foundation.

    Lori

    On 4/24/09 11:20 AM, "Linda Trevino" <LTrevino@psu.edu> wrote:

    Colleagues,
    Since we're on this subject of corporate governance, if you were going to give MBAs one great reading on the topic (from and ethics and CSR perspective), what would it be?
     

    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Lori Ryan
    Sent: Friday, April 24, 2009 1:43 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] How business schools have failed business

    Mr. Jacobs makes an interesting point, but overstates the pervasiveness of the problem.  One of the things that drew me to San Diego State in 2001 was that the College had been offering a dedicated MBA Seminar in Corporate Governance since 1999.  The class is still going strong, and Corporate Governance is now a required class in our Executive MBA program.  We've also added a dedicated week on corporate governance to our undergraduate Business Ethics classes.  It's a core subject, integrating Strategy, Finance, Ethics, and Law, that will only become more central in the future.

    Lori

    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    San Diego State University
    San Diego, CA   92182


    On 4/24/09 6:03 AM, "Archie Carroll" <acarroll@uga.edu> wrote:
    • APRIL 24, 2009, 3:58 A.M. ET
    How Business Schools Have Failed Business
    Why not more education on the responsibility of boards?
      
    By MICHAEL JACOBS
    _______________________________________________________________________
    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________
    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    San Diego State University
    San Diego, CA   92182
     _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



  • 7.  How business schools have failed business

    Posted 04-25-2009 11:29
    The article raises some interesting points worthy of comment:

    First, Bernie Madoff did not attend elite business schools such as Kenan-Flager. He worked as a plumber and then graduated from Hofstra College in 1960 with a degree in political science. There was no business ethics course for him to ace and no course on boards or anything else in his curriculum. Using him as an example illustrates, for one, the culpability of people who were willing to put their life savings in the hands of a plumber with nothing more than a poly sci degree. Moreover, it highlights either the futility of business education (don't need one to get ahead) or the usefulness of ethics courses (if only he had gone to business school and taken a business ethics course).

    Second, the short term view that Jacobs derides is too bad, but it's inevitable so long as government requires short term reporting and short term tax payments. The problem, in other words, is systemic, bears the stamp of the heavy hand of government, and is not just a business and business education problem.

    Third, the issues Jacobs focuses on do not have much relevance to most MBA students who have no intention (or hope) of becoming top executives capable of influencing the policies of large corporations.

    Fourth, insofar as the MBA is a general business degree and most programs are designed to get students out in a couple of years, it should come as no surprise that corporate governance of this sort is overlooked. We could come up with a laundry list of other things that should be included as a degree requirement, but unless the program is changed and extended significantly thereby making it less attractive to all but the most committed students, oversights such as these will continue to exist.

    Martin Calkins
    Assistant Professor
    University of Massachusetts Boston
    College of Management
    Department of Management and Marketing
    100 Morrissey Boulevard
    Boston, MA 02125

    Phone: 617.287.7031
    FAX: 617.287.7877
    .•´¯`•.¸¸.•´¯`•.¸¸. ><((((º>
    ¯`•.¸¸.><((((º>¯`•.¸¸.><((((º>




    -----Original Message-----
    From: Social Issues in Management Listserv on behalf of Lori Ryan
    Sent: Fri 4/24/2009 2:35 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] How business schools have failed business

    The Business Roundtable put out a very nice corporate governance overview
    piece in 2005:
    http://www.businessroundtable.org/sites/default/files/CorporateGovPrinciples
    .pdf My more theoretical favorite is Chapter 12 of Oliver Williamson¹s
    1985 Economic Institutions of Capitalism (which must be accompanied by the
    book¹s Figure 1-2). The bible on the subject (although much more than you
    need) is Monks and Minow¹s Corporate Governance tomb, now in its 4th (2008)
    edition. These aren¹t specifically focused on ethics, but virtually any CG
    reading has an implicit (if not explicit) ethical foundation.

    Lori

    On 4/24/09 11:20 AM, "Linda Trevino" <LTrevino@psu.edu> wrote:

    > Colleagues,
    > Since we¹re on this subject of corporate governance, if you were going to give
    > MBAs one great reading on the topic (from and ethics and CSR perspective),
    > what would it be?
    >
    >
    > From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On
    > Behalf Of Lori Ryan
    > Sent: Friday, April 24, 2009 1:43 PM
    > To: SIM@AOMLISTS.PACE.EDU
    > Subject: Re: [SIM] How business schools have failed business
    >
    > Mr. Jacobs makes an interesting point, but overstates the pervasiveness of the
    > problem. One of the things that drew me to San Diego State in 2001 was that
    > the College had been offering a dedicated MBA Seminar in Corporate Governance
    > since 1999. The class is still going strong, and Corporate Governance is now
    > a required class in our Executive MBA program. We¹ve also added a dedicated
    > week on corporate governance to our undergraduate Business Ethics classes.
    > It¹s a core subject, integrating Strategy, Finance, Ethics, and Law, that will
    > only become more central in the future.
    >
    > Lori
    >
    > Lori Verstegen Ryan, Ph.D.
    > Professor of Management
    > Director, Corporate Governance Institute
    > San Diego State University
    > San Diego, CA 92182
    >
    >
    > On 4/24/09 6:03 AM, "Archie Carroll" <acarroll@uga.edu> wrote:
    > * APRIL 24, 2009, 3:58 A.M. ET
    > How Business Schools Have Failed Business
    > Why not more education on the responsibility of boards?
    >
    > By MICHAEL JACOBS
    > _______________________________________________________________________
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: http://sim.aomonline.org
    > _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery options, you
    > can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1
    > _______________________________________________________________________
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: http://sim.aomonline.org
    > _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery options, you
    > can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1
    > _______________________________________________________________________
    >
    >

    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    San Diego State University
    San Diego, CA 92182


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  • 8.  How business schools have failed business

    Posted 04-27-2009 10:58

    Dear Linda,

     

    I like the paper from Allen White on the Stakeholder Fiduciary see the link to BSR: http://www.bsr.org/reports/BSR_AW_Corporate-Boards.pdf

    My MBA students gave me good feedback on it as well.

    Sunny greets from Cranfield

    Heiko

     

     

    -----------------------------------------------------------------------

    Dr. Heiko Spitzeck

    <st1:place w:st="on"><st1:placename w:st="on">Cranfield</st1:placename> <st1:placetype w:st="on">University</st1:placetype></st1:place>

    Doughty Centre for Corporate Responsibility

    Tel: 0044 (0) 1234 751122 ext 3219

    www.doughtycentre.info

     

    NEW:

    Humanism in Business

    <st1:place w:st="on"><st1:placename w:st="on">Cambridge</st1:placename> <st1:placetype w:st="on">University</st1:placetype></st1:place> Press

    http://www.cambridge.org/uk/catalogue/catalogue.asp?isbn=9780521898935

     

    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Linda Trevino
    Sent: 24 April 2009 19:21
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] How business schools have failed business

     

    Colleagues,

    Since we're on this subject of corporate governance, if you were going to give MBAs one great reading on the topic (from and ethics and CSR perspective), what would it be?

     

    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Lori Ryan
    Sent: Friday, April 24, 2009 1:43 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] How business schools have failed business

     

    Mr. Jacobs makes an interesting point, but overstates the pervasiveness of the problem.  One of the things that drew me to <st1:place w:st="on"><st1:placename w:st="on">San Diego</st1:placename> <st1:placetype w:st="on">State</st1:placetype></st1:place> in 2001 was that the College had been offering a dedicated MBA Seminar in Corporate Governance since 1999.  The class is still going strong, and Corporate Governance is now a required class in our Executive MBA program.  We've also added a dedicated week on corporate governance to our undergraduate Business Ethics classes.  It's a core subject, integrating Strategy, Finance, Ethics, and Law, that will only become more central in the future.

    Lori

    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    <st1:place w:st="on"><st1:placename w:st="on">San Diego</st1:placename> <st1:placetype w:st="on">State</st1:placetype> <st1:placetype w:st="on">University</st1:placetype></st1:place>
    <st1:place w:st="on"><st1:city w:st="on">San Diego</st1:city>, <st1:state w:st="on">CA</st1:state>   <st1:postalcode w:st="on">92182</st1:postalcode></st1:place>


    On 4/24/09 6:03 AM, "Archie Carroll" <acarroll@uga.edu> wrote:

    • APRIL 24, 2009, 3:58 A.M. ET

    How Business Schools Have Failed Business
    Why not more education on the responsibility of boards?
      
    By MICHAEL JACOBS

    _______________________________________________________________________

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